Solar Guide
Solar in Houston
Houston’s abundant sunshine and rising electricity costs make solar installation a smart choice for homeowners. With Texas electricity prices jumping 28% from 2020 to 2024, many residents are exploring solar panels for their homes to control energy costs.
Understanding your options and the installation process is key to making an informed solar decision in Houston.
Key Takeaways
- Houston’s abundant sunshine and rising electricity costs make solar installation a smart financial choice for local homeowners.
- Texas offers excellent solar incentives including federal tax credits and property tax exemptions that reduce installation costs.
- Solar systems provide long-term savings with average Houston homeowners saving $76,000 over 25 years while protecting against rate increases.
Solar Cost Calculator
Our Houston solar cost calculator uses real installation data from neighborhoods like Katy, The Woodlands, Sugar Land, and Pearland. Get accurate pricing estimates based on actual local projects, not generic estimates.
System
Cost
Savings
Houston Electricity Prices
Houston electricity costs have climbed steadily, making energy expenses a growing concern for local homeowners seeking budget relief.
Texas electricity rates rose from 12.1 cents per kWh in 2021 to 14.9 cents in 2024, representing a 23% increase over three years.
Solar panels allow Houston homeowners to generate their own electricity, reducing dependence on the grid and providing protection against future rate increases.
Over 25 years, solar systems can deliver substantial savings while electricity rates continue climbing, offering predictable energy costs and long-term financial benefits.
Price of Energy: Texas vs National Average
Houston Area Utility Providers
Houston residents primarily receive electricity from Entergy Texas, which charged 13.2¢ per kWh in 2023—below both Texas state (14.50¢) and national averages (16.0¢).
Entergy Texas benefits from the state’s diverse energy mix and deregulated market, helping keep rates competitive compared to other regions nationwide.
Even with below-average rates, solar panels can provide long-term price stability and protection against future utility rate increases in Houston.
Houston Utilities Electricity Rates
Texas Solar Incentives
Houston homeowners can significantly reduce solar installation costs through various solar incentives in Texas and federal programs.
These incentives include property tax exemptions that prevent your home’s value increase from raising taxes, plus net metering programs offered by most Houston-area utilities.
Research current incentive availability thoroughly, as programs can change. Acting promptly ensures you maximize available savings opportunities.
$8,189
Average savings in Texas solar rebates
| Incentive | Type | Description | Source |
|---|---|---|---|
| Residential Clean Energy Credit | Federal tax credit | A federal tax credit worth 30% the cost of a solar panel system in the year it’s installed | Learn More |
| Property Tax Exemption | State tax exemption | No property tax increase from solar installations. Example: $20k system saves ~$400/year at 2% tax rate. | Learn More |
The Residential Clean Energy Credit lets people claim a tax credit worth 30% the cost of a solar panel system in the year it’s installed. The credit can only be used against taxes you owe or have already paid that year, but any excess credit can be rolled over to future years.
The credit is broadly available, though there are a few restrictions — you must own the panels and they must be on a house you live in — so be sure to consult a tax professional about your situation.
Texas offers a property tax exemption for solar and wind-powered energy devices, which means homeowners can exclude the added value of their solar installation from their property tax assessment. When you install solar panels on your home, they typically increase your property’s appraised value, but this exemption ensures you won’t pay additional property taxes on that increased value.
To qualify for this exemption, your solar energy system must be installed on property you own and use as your residence. You’ll need to apply for the exemption with your local county appraisal district using Form 50-123 before the May 1st deadline. The exemption continues as long as you own the property and the solar system remains installed. This benefit can result in significant long-term savings, as it protects you from paying higher property taxes that would normally result from your home’s increased value due to the solar installation.
Net metering in Texas varies significantly by utility company, with most areas offering net billing (export credit) rather than traditional 1:1 net metering. Under these programs, your solar panels first power your home directly, helping you avoid purchasing electricity at retail rates. Any excess energy your system produces is then sent to the grid, where you receive credits that reduce your monthly electric bill.
The financial benefits depend on your specific utility company and location. Export credit rates typically range from 3-8 cents per kWh for excess solar energy sent to the grid, though some utilities like Shell Energy offer 7 cents per kWh through their buyback program. A few utilities still offer true 1:1 net metering where excess production offsets consumption on an equal basis. Many utilities charge additional monthly fees ranging from $4.95 to $30 for solar customers, and most programs settle monthly rather than annually, meaning unused credits are often forfeited at the end of December.
Eligibility requirements and program details vary by utility company, so you’ll need to check with your specific electricity provider. Some areas of Texas operate in deregulated markets where you can choose your retail energy provider (REP), which may offer different solar compensation options. It’s important to understand that Texas doesn’t have a statewide net metering policy, so the terms and benefits can change based on your utility’s individual policies and rate structures.
Ready to start saving with solar?
Speak with a Palmetto solar expert to find out exactly how much you can save with Texas incentives.
Get a Free QuoteHouston Solar Irradiance
Solar panel production varies throughout the year based on daylight hours, weather patterns, and sun intensity. Understanding how seasons affect your solar system helps set realistic expectations for your investment.
Houston’s hot climate and frequent cloud cover create unique solar conditions. Despite occasional storms and humidity, proper system design maximizes year-round energy production effectively.
Solar Production in Houston by Month
What Can Your Solar System Power?
Summer Production (July)
In July, your 10 kW system could power:
- 3.6 average homes (15 kWh/day per home)
- or Run central AC for 18 hours AND power all other appliances
- or Fully charge 5.4 Tesla Model 3 electric vehicles
Winter Production (December)
In December, your 10 kW system could power:
- 2 average homes (15 kWh/day per home)
- or Keep your home heating system running for 15 hours
- or Fully charge 3 Tesla Model 3 electric vehicles
Annual Production
Over a year, your 10 kW system could:
- Offset 10 tons of carbon dioxide emissions
- or Equal the environmental benefit of planting 175 trees
- or Save approximately $4,234 in electricity costs
Want to know exactly how much solar can power your home?
Get a personalized solar analysis based on your actual home, energy usage, and roof characteristics.
Get My Custom EstimateSolar Installations in Houston
We’ve mapped every solar installation across the United States to show you something exciting: your Houston neighbors who’ve already made the switch to clean energy! Click any hexagon to discover how many solar systems are powering homes in that area.
Leasing Solar Panels
Houston homeowners served by CenterPoint Energy have access to Power Purchase Agreements (PPAs) through Palmetto’s LightReach program. With a PPA, you pay only for the power your solar panels produce at a fixed rate per kilowatt-hour, typically lower than your current electricity costs.
Unlike purchasing solar panels outright, PPAs eliminate upfront costs, maintenance responsibilities, and system performance risks. Palmetto handles all installation, monitoring, and repairs while you enjoy immediate savings on your electricity bills. This makes solar accessible without the large initial investment typically required.
PPAs offer predictable energy costs and protection against rising utility rates. Learn more about financing options at solar buy or lease or explore LightReach to see if this program fits your needs.
Go solar without the investment
With LightReach, there are no investment costs to recoup, loan payments to manage, or maintenance needs to take on. As soon as your panels are active, your solar savings are too!
Learn MoreFrequently Asked Questions
Yes, solar makes excellent sense in Houston. The city’s abundant sunshine, rising electricity costs, and available incentives create ideal conditions for solar investment.
Houston homeowners typically save around $76,000 over 25 years while protecting against future rate increases. With Texas property tax exemptions and federal tax credits reducing upfront costs, solar provides both immediate and long-term financial benefits for local residents.
Houston does not have traditional net metering. Instead, CenterPoint Energy customers receive net billing through Shell Energy’s Buyback Plan, which credits excess solar production at 7 cents per kWh.
This program credits your monthly bill for solar energy sent to the grid, with unused credits rolling over monthly until December when they’re forfeited. While not 1:1 net metering, it still provides meaningful savings for Houston solar customers.
Yes, solar panels increase home value in Houston, TX. Research shows solar installations typically add 4% to home values, with Zillow studies indicating a 4.1% increase nationally.
In Houston’s competitive real estate market, solar panels represent valuable energy savings and modern home features that appeal to buyers. Additionally, Texas property tax exemptions mean you won’t pay higher taxes on the increased value from your solar installation.
Solar costs in Houston vary by system size and home energy needs. After federal tax credits, typical costs range from $14,179 for small homes to $25,057 for large homes, with medium-sized homes averaging $19,107.
These prices reflect final costs after the 30% federal tax credit and include installation, equipment, permits, and warranties. Most Houston homeowners see 8-year payback periods with $76,000 in 25-year savings.
Yes, solar is financially worth it in Houston. With abundant sunshine and rising electricity costs, Houston homeowners typically save $76,000 over 25 years while achieving 8-year payback periods.
Federal tax credits reduce upfront costs by 30%, and Texas property tax exemptions prevent higher taxes on increased home value. Solar provides immediate monthly savings plus long-term protection against rising utility rates.
We are Palmetto Solar, a leading solar installation company serving Houston and Texas. As a national company with local focus, we’ve completed 3,810 installations in Texas since 2020, bringing extensive experience to Houston homeowners.
We offer competitive financing options and work with trusted local installation partners to ensure quality service. Our comprehensive approach includes system design, permitting, installation, and ongoing support to make solar accessible and reliable for Houston residents.